Washington University staff members are unable to provide personal tax advice. If you have additional questions, please consult a tax advisor.
There are two issues regarding receiving fellowship stipend payments of which to be aware: (1) You may need to make estimated tax payments throughout the year and (2) Fellowship stipends may constitute taxable income that is reportable on your annual tax return as taxable scholarship income. See links at the bottom of this page for additional information.
Taxability of Stipend Payments
Stipend payments are subject to tax when applied to living expenses, health insurance, etc. They are not subject to tax if applied to books and tuition required for a formal degree program.
Stipend payments are not wages or earned income. They cannot be used to claim certain credits, such as the Earned Income Credit. Note: To the extent that you have earned income from other sources, you may be able to use that income to claim certain credits.
Stipend Payment Withholding Rules
US citizens, permanent residents, or resident aliens (US persons) for US tax purposes:
- Under US tax law, the university is generally not allowed to withhold on stipend payments to US persons.
- Under Missouri tax law, the university is generally not allowed to withhold on stipend payments to US citizens, permanent residents, or tax residents.
Nonresident aliens for US tax purposes:
- Under US tax law, the university is generally required to withhold on stipend payments to nonresident aliens. In the event that the individual is eligible for a reduced rate of withholding under a tax treaty, the university may not be required to withhold. In this case, the individual is also not required to make estimated tax payments to the IRS.
- Under Missouri tax law, the university is generally not allowed to withhold on stipend payments to nonresident aliens.
Reporting Stipend Income To You
US citizens, permanent residents, or resident aliens (US persons) for US tax purposes:
- Fellowship stipends paid to US persons are not required to be reported to you by the university on any type of IRS form.
- Total stipend income you received from the university during the calendar year will be provided to you on stipend letters. These letters are informational only and should not be submitted to the IRS. Additionally, the letters are not substitutes for IRS Form 1099-MISC or a Form W-2.
- Monthly stipends, including health care reimbursements, will be reported on a stipend letter available for download in HRMS Self Service no later than January 31. You will receive an email notification in January when the letter is available.
- Other stipends, such as additional stipend payments, reimbursements of relocation expenses, and reimbursements for books, computer equipment or other supplies, not included in monthly stipends will be reported on a stipend letter that will be mailed to your address of record.
Nonresident aliens for US tax purposes:
- Fellowship stipends paid will be reported on Form 1042-S no later than March 15.
- Forms 1042-S will report the total taxable stipend amount you received from the university during the calendar year as well as any tax withholding that was applied.
Additional Resources
- Internal Revenue Service main customer service line (1-800-829-1040)
- State of Missouri local tax information line (314-877-0177)
- IRS Publication 970 – Tax Benefits for Education
- IRS Publication 519 – US Tax Guide for Aliens
Quarterly Estimated Tax Payments
The U.S. Tax System is a “pay-as-you-go” system. As you receive taxable income throughout the year, you are […]
Reporting Stipend Income On Your Tax Return
For US Citizens, Permanent Residents & Resident Aliens for US Tax Purposes Stipends reported to you on a […]